Exploit China’s Market Opening instead of Waiting for Political Change

Reuters says in its report “China to show off its zeal to import but business awaits policies”, “China will soon host a huge trade fair to highlight its commitment to free trade and show off its willingness to import, but skeptical foreign businesses and diplomats say they want to see concrete policy changes to improve market access.”

Those skeptical foreign businesses will lose the golden opportunity to take and expand their shares in the Chinese market.

China’s policies are very clear for them. It wants to switch to innovation-, creation- and consumption-geared economic growth. To increase consumption, China has to import more goods from abroad, especially goods of fine quality, which usually contain better technology. Such goods will enlighten Chinese scientists and engineers in their innovation and creation. The success of imported goods will give them incentives to develop better goods for Chinese consumers.

Foreign businesses have to export goods better than China’s to grab a share of the Chinese market and develop even better goods to maintain their market share. Otherwise, they will lose their chances in China’s vast and fast growing market.

As for the “substantial new market-opening policies” Reuters says some are waiting for, Chinese leaders have declared China’s new policies that they must be very clear about. What they are waiting in essence is that China will be a free market like an ideal Western one.

Do not forget, China has never been a democracy in Western sense in its thousands years of history. Since the Qin Dynasty more than 2,000 years ago, China has been a centralized empire for most of the time.

Centralism remains the dominate principle in China’s political system as indicated by the stress of Party leadership in Xi Jinping Though on Socialism with Chinese Characteristics for a New Era.

If the Party wants further opening, no other political force can stop that. So will be the case if the Party wants the opposite. However, if you have got and maintained a market share in China and make Chinese people like and get used to using your products, it is difficult for the Party to drive you away even if it wants to close its door because the Party adheres to its doctrine of “putting the people first.”

Judging by China’s ambition as reflected in its Made in China 2025, China wants not only to replace import of high-tech products with Chinese ones but also export its high-tech products abroad. Therefore, it has to open its market so that other countries may not close their markets to Chinese goods.

China has the confidence that it will be a winner in competition. Without such confidence China can never realize its China Dream.

Do you have such confidence to compete with China. If you haven’t, you’d better avoid Chinese market and even close your market to future Chinese high-tech goods.

From that point of view, US trade war against China is suicidal.

Comment by Chan Kai Yee on Reuters’ report, full text of which can be viewed at https://www.reuters.com/article/us-china-trade-expo/china-to-show-off-its-zeal-to-import-but-business-awaits-policies-idUSKCN1MP2OJ.

No 2nd Generation of CCP Collective Leadership in China

China’s Core System (2) (Part (1) is my post “The Conundrum of China’s Collective Leadership” dated January 28)

What about the second generation of collective leadership which according to Deng, he was its core?

From 1977 after Mao’s death to 1987 the Politburo Standing Committee (PSC) of CCP Central Committee was controlled by powerful elders Ye Jianying (who died in 1985), Deng Xiaoping, Chen Yun and Li Xinian, which to some extent can be regarded as leadership of three elders, an oligarchy instead of a collective leadership. When Deng, Chen and Li retired from the PSC in 1987, through Bo Yibo Deng told Chen and Li and got their consent that there should be only one mother-in-law for the new PSC that took office in late 1987, said Zhao Ziyang in his secret memoir. It made clear that Deng was the only one who had the power of leadership and all the other members of the so-called collective leadership had to accept Deng’s leadership faithfully, i.e. Deng was the core who had the final say.

What about the new PSC?

As Zhao Ziyang, the demoted CCP general secretary, pointed out in his secret memoir, all the PSC members were but “daughter-in-laws” who had to obey the instructions of Deng who regarded himself as PSC members’ “mother-in-law”. There was no collective leadership of the PSC after the three powerful elders Deng, Chen and Li had retired from the PSC. The general secretary and the PSC simply did what Deng told them to do. Deng was the real leader behind the scene.

Before Tiananmen protests, Deng consulted other elders in making major decisions for the PSC. If there had been collective leadership, it must have been the collective leadership of powerful elders led by Deng. However, powerful elders differed in their opinions on the way to deal with Tiananmen protests so that Deng had to make the hard decision of armed suppression alone. Deng realized that there had to be a strongman as the core of CCP collective leadership able to make hard decision alone like him.

That was why Deng appointed his successor Jiang Zemin as the core of the third generation of CCP collective leadership. He wanted there to be a strongman like him. As an experienced politician and general, Deng certainly knew that the core had to have the power as the core, which could not be transferred by him but had to be established by Jiang on his own. However, he had to set the example what power a core should have.

He used Mao as an example but it was not good enough. Then he set his Southern Tour as an example to Jiang that a core had the power to tell all officials to act in accordance with his instructions no matter whether the core hold any official position or not.

Deng said during his well-known Southern Tour that those who would not carry on his reform and opening-up should be fired. At that time there was serious backlash due to the Tiananmen Protests. Conservatives’ resistance to the reform had almost put an end to Deng’s reform. Jiang Zeming, though a true reformist, appeared like a conservative as Deng had given him the instruction that Jiang’s priority was to establish his powerbase. At that time nearly all China watchers outside China regarded Jiang as a conservative.

Deng alone without official position recovered the reform by his power as the core of CCP leadership.

Where was CCP’s collective leadership?

There was no collective leadership at all. There was only the leadership of the core. Deng had no need to call a meeting of PSC to discuss and approve his instruction. He simply gave his instruction. What the PSC should do was to discuss the way to carry out Deng’s instruction.

That was why I said in my book “Tiananmen’s Tremendous Achievements” that China’s political system was CCP Dynasty and the core of CCP Dynasty was in fact the emperor of the dynasty.

It seems bad, but is in reality good. If the core does not remain in power there will be no continuity of his wise policy. In Deng’s case, China’s reform and opening-up would not have been carried on after Tiananmen Protests.

A leader with wisdom and integrity is very rare, if a country has found one it shall keep him as the leader until the time he is unable or unwilling to bear the heavy burdens of leadership.

It will be much better if such a leader is found and appointed when he is young. There will be much more time for him to play his wonderful role as a leader to bring prosperity to his country and happiness to his people. China’s well-known prime minister Zhuge Liang was appointed top advisor to Liu Bei (later emperor of the Empire of Shuhan) when he was only 27. He helped Liu set up the Empire and was its prime minister for more than two decades until he died at the age of 54.

The problem now is that a man with wisdom and integrity is appointed leader when he is about sixty years old and can only serve 2 to 3 terms. Therefore, it is good that he will remain the core and continue his leadership after his retirement. That was the case with Deng Xiaoping. It is also the case with Jiang Zemin.

Deng became the core in 1978 and retired from all official posts in 1990 but had to remain in charge after his retirement though he was succeeded by Jiang his chosen core of the third generation of CCP leadership. As Jiang had not established his powerbase as the core, when conservatives had almost put an end to Deng’s reform, Deng conducted his Southern Tour in 1992 to bring China back to the course of reform and opening-up.

What power did Deng have to make the whole CCP and country obey his instruction to carry on his reform? His power as the core of CCP leadership. In 1990, Deng retired from his last official post as the chairman of Central Military Commissions but had not retired from his position as the core of CCP leadership. China is lucky Deng though became leader in 1978 when he had already been 74 quite old to bear the burdens of leadership, he lived a long life and could rule China for nearly two decades till he died at the age of 93. If Deng had become Chinese leader earlier and ruled China longer, Jiang would not have encountered so much difficulty in establishing his powerbase as the core of the third generation of CCP leadership.

Deng told Jiang he would not rest at ease until Jiang had actually become the core. He helped Jiang obtain control of PLA (the People’s Liberation Army) by removal of Yang brothers’ control of PLA. Still by 1997 before the 15th Congress Jiang was challenged by PSC members Qiao Shi and Li Peng. As Deng was dead by that time, Jiang sought powerful elder Bo Yibo’s support to maintain his position as the core.

Jiang was chosen as the core in 1989 but by 1997, he still had not fully established his position as the core. He had really gained the power as the core but we do not know the exact time when Jiang had really established enough powerbase as the core. If we assume that he really became the core by 1997, he only ruled China as the core for about 2 decades till now when he was succeeded by his chosen successor Xi Jinping.

Hu Jintao has never gained the position as the core though he has set up his very strong CYL faction.

As Jiang remained the core and remained in charge, the PSC with Hu as the head was not a collective leadership; therefore, there was no third generation of collective leadership either. This will be elaborated in my next post.

Article by Chan Kai Yee

The Conundrum of China’s Collective Leadership

China’s Core System (1)

Collective Leadership to Avoid Reemergence of Mao-style Autocracy
Deng Xiaoping had to find a way to avoid the reemergence of Mao-style autocracy that is equivalent to tyranny. He invented a system of collective leadership, in which a leader had limited tenure and could not be reelected when he had reached a certain age. In this system, there will not be much succession problem. However, this system does not work in China. A newly elected collective leadership had no real power while the retired elders remained powerful. As a result Chinese politics were dominated by retired elders behind the scene.

No Collective Leadership in Chinese History
Judging by China’s thousands-year long history, collective leadership is something unprecedented as there had never been collective leadership in China. CCP has given China a formal name the People’s Republic of China (中華人民共和國 in Chinese), in which the term “republic” has come from abroad as there has never been a republic in China, not even in a separate state when China was split. The term republic in Chinese is “共和国 (gonghe guo)”in which “國 (guo)” means country. The term “共和 (gonghe)” that describes “guo” the country is taken from a 14-year period called “Gonghe Administration” in Zhou Dynasty beginning from (841 or 842 BC) when King Li of Zhou, a tyrant, was driven away so that the Kingdom of Zhou was jointly run by Duke Ding of Zhou and Duke Mu of Zhao for 14 years until King Li’s son had grown up to succeed to King Li.

Strictly speaking a group of two people cannot be regarded as a collective leadership. At best the kingdom was run by an oligarchy instead of a collective leadership at that time.

However, that was only the opinion of one major group of Chinese historians. There was another major group of Chinese historians who disagree with the first group and hold that in the 14 years China was run by Duke Wu of Wei called “共伯和 (Gongbohe)” shortened as “共和 (Gonghe)”. That was why the 14 years when Duke Wu of Wei was in charge of the kingdom on behalf of King Li’s successor was called “Gonghe Administration”. If that group’s view is correct, there was no oligarchy at that time let alone collective leadership.

In the Spring and Autumn and Warring States Periods (770 BC to 221 BC), the kings of the Zhou Dynasty was weak, China was split into lots of states, each of which was run by a sovereign, i.e. was an autocracy. There was no collective leadership in any of the states.

China’s Centralism since Qin Dynasty (221BC to 207 BC)
When Emperor Shihuang of Qin had conquered all other states and unified China, he established his centralized rule to avoid China being split into various states again. Since his reign, there was always centralized autocracy in China. Even in the few periods when China was again split into a few states, there was no collective leadership but centralized autocracy in each state without exception.

That was the situation in empires and kingdoms before the establishment of a republic called the People’s Republic of China, a republic in name but an autocracy or several autocracies governed by warlords. After the establishment of PRC, there was at first the people’s democratic dictatorship but later changed into proletarian dictatorship without even the term “democratic”. Certainly, there was no democracy, but was there collective leadership?

No Collective Leadership in Mao Era
According to Deng’s description, in Mao era, there was collective leadership with Mao as the core that has the final say.

Mao made the decision of sending troops to Korea in spite of the opposition of all other members of the collective leadership. At that time, Mao indeed had the final say but was there collective leadership when the opinions of all other members of the collective leadership were disregarded?

Mao’s victory in the Korean War greatly enhanced his prestige and enabled him to severely denounce the members of the collective leadership under him who advocated not too fast but sure economic growth. His fierce attack of them silenced all oppositions so that he was able to madly pursue unrealistically high economic growth in his Great Leap Forward Campaign that resulted in his great famine that caused the death of starvation of millions of people. By that time there was no collective leadership at all.

Mao then retired to the second line and let Liu Shaoqi be the head of the group of collective leadership with Mao giving instructions to them behind the scene. When he found that the collective leadership disobeyed him, he launched the Cultural Revolution to seize power back from the collective leadership and persecuted almost all the members of the collective leadership. In the last decade of Mao’s rule, Mao carried out the Cultural Revolution as a tyrant with absolute power instead of the core of collective leadership.

To sum up, in Mao era, there was no collective leadership but the absolute monarchy of Mao, though Mao was regarded by Deng as the core of a collective leadership,

What about CCP’s second collective leadership with Deng as its core?

We will discuss in my post tomorrow.

Article by Chan Kai Yee

US Unable to Counter China Surpassing It in Some Military Technology

Mil.huanqiu.com says in its report “Russian expert: Why is China able to surpass the US in some military technologies?” on January 16 that according to Russian Sputnik Satellite Networks’ report on January 15, the Subcommittee on Emerging Threats and Capabilities under US Senate Armed Services Committee held a hearing on China’s new military technology and dual military and civilian technology. Some experts said at the hearing that China has had some achievements at quite high level and surpassed the US in some areas.

Some Russian military experts are of the opinion that recently China has perhaps been leading in quantum technology. What shall the US do to reverse that trend? They believe that the US shall implement large state research programs to provide greater and more stable support for them with state policies.

However, it is necessary to point out that US ability of response to such challenges is doubtful. China’s successes are mainly due to its ability to concentrate all resources. Such centralism of power in the US was only possible in the critical time of the Cold War, for example Project Apollo in which the US invested 4% of its entire national budget in some years.

Source: mil.huanqiu.com “Russian expert: Why is China able to surpass the US in some military technologies?” (summary by Chan Kai Yee based on the report in Chinese, full text of which in Chinese can be viewed at http://mil.huanqiu.com/world/2018-01/11526565.html)

China Stresses the Advantages of Its One-Party System

The People’s Daily Editorial says that China’s one-party system is much better than multi-party democracy.

1. The system has the advantages in concentrating national strength and resources.

In a multi-party democracy, various parties represent various vested interests. Due to conflict of interests, they are used to attacking, mud slinging, undermining and even oppressing one another. They are each like a company pursuing their different interests. As a result, the party in power cannot unite all other parties to focus their efforts on one common goal.

In China’s one-party system, however, the Central authority is the commander-in-chief that directs all the people. It is responsible to the nation, the people and the Party so that it always is the strong core of leadership. If a country wants to achieve something great, it has to concentrate all the efforts and forces while the core of leadership shall have high capabilities of organization, mobilization, long-term planning, decision making and implementation.

With high centralism, China is able to carry out lots of infrastructure construction, enhance transportation and logistic capabilities, popularize new energy needed for its reform of energy generation and environmental protection, development of digital and biometric Internet, etc. All the above need the concentration of national strength by the Central authority and can not be done by one company alone.

Such concentration of forces and resources is difficult in a multi-party democracy.

2. Continuity.

The Party can focus on drawing and carrying out long-term plans to attain long-term goal as it is always in power while in a multi-party system, a ruling party mostly focuses on winning the next election. It only pursues short-term achievements to please voters in order to win the next election. It cannot pursue any long-term achievement that may have unfavorable short-term consequence. Even if it has vision and drawn a very good plan, it can never ensure the plan will be continued by a successor of a different party.

The editorial quotes former French Prime Minister Dominique de Villepin as saying, “China has the concentration of force and determination of long-term struggle that Western countries often lack.”

That is true, but what about the axiom of power and corruption: Power tends to corrupt and absolute power corrupts absolutely. One-party autocracy may give rise to absolute power, but the editorial says Xi Jinping does not believe that. However, in fighting rampant corruption, Xi has repeatedly said that power should be restricted by a cage of regulations. Xi began his fight against corruption with his mass line education campaign, which was in fact democratic supervision of officials by the masses of people.

In his speech to the 19th Congress, Xi announced China’s task from 2035 to the middle of the 21st century “to develop China into a great modern socialist country that is prosperous, strong, democratic, culturally advanced, harmonious, and beautiful.

What will be a democratic country with a one-party system? Perhaps, the party shall be a party of the whole people with inner-party democracy. I hope the continuity, concentration of strength and the doctrine of “put the people first” will be maintained.

The third represent of Jiang Zemin’s Three Represents already says that CCP represents the whole people so that since then even capitalists have been allowed to join CCP. If so the one-party government with inner-party democracy may be the government of the people, by the people and for the people by the middle of the 21st century.

Comment by Chan Kai Yee on People’s Daily editorial, full text of which in Chinese can be viewed at http://paper.people.com.cn/rmrb/html/2017-12/06/nw.D110000renmrb_20171206_8-01.htm.

Provincial China officials used fake data to evade aluminum, steel capacity curbs: China Youth Daily

Reuters Staff December 26, 2017

BEIJING (Reuters) – Local officials in China’s northern Shandong province have used fake data to help aluminum and steel producers avoid mandatory production curbs, the state-run China Youth Daily reported, citing a Ministry of Environmental Protection inspection team.

“Local official have covered up for aluminum producers, leading them to build up their capacity,” the Youth Daily reported citing a letter from the inspection team.

China has imposed its most stringent measures on heavy industry, including steel, aluminum and coal mining, to reduce production in a battle against air pollution.

Closures of steel plants, coal mines and aluminum smelters have roiled commodities market since the start of 2016, leading to a rally in prices.

The sharply-worded letter from the environment ministry could be an indication that Beijing is tightening its scrutiny of heavy industries to force them to comply with the capacity cuts.

The ministry said officials in major aluminum producing city Binzhou had used fake certificates and false data to obtain approval for the construction of 2.4 million tonnes of new aluminum production capacity in 2014.

In addition, major steel producer Rizhao Steel was still running a mill with 5.94 million tonnes of capacity that was due to shut in 2015.

Rizhao Steel and the Ministry of Environmental Protection were not immediately available for comment.

Reporting by Meng Meng and Aizhu Chen; Editing by Peter Graff

Source: Reuters “Provincial China officials used fake data to evade aluminum, steel capacity curbs: China Youth Daily”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.

Clash of Civilizations in Hong Kong over Pursuit of Independence

Hundreds of lawyers wearing black stage a silent protest to the Court of Final Appeal against China's parliament that passed an interpretation of Basic Law, in Hong Kong, China November 8, 2016. REUTERS/Tyrone Siu

Hundreds of lawyers wearing black stage a silent protest to the Court of Final Appeal against China’s parliament that passed an interpretation of Basic Law, in Hong Kong, China November 8, 2016. REUTERS/Tyrone Siu

Centralism has been Chinese traditional culture for more than two thousand years. It is natural for Chinese government and people to oppose split of the country so fiercely. They would never allow any part of China to become independent.

That is why China is determined to take Taiwan by force if it dares to declare independence. That is not a threat. It is what Chinese military has been making preparations for a long time.

That is why Taiwan President Tsai Ing-wen dares not declare independence as she and her party desire and why the United States supports her though it openly declare that it opposes Taiwan independence.

That is why Chinese parliament, the National People’s Congress (NPC), interpreted on Monday Hong Kong’s mini-constitution, the Basic Law, to prevent those who advocate Hong Kong independence from becoming Hong Kong’s legislators.

Western culture, however, advocates self-determination. If most people in a region want independence, they shall be allowed to establish a new nation separate from the nation they originally belong to. That is why Britain says it is concerned.

In its November-7 report on Britain’s response titled “Britain says concerned by Chinese National People’s Congress’s decision on Hong Kong”, Reuters quotes British Foreign Office spokeswoman as saying, “We urge the Chinese and Hong Kong SAR Governments, and all elected politicians in Hong Kong to refrain from any actions that fuel concerns or undermine confidence in the ‘One Country, Two Systems’ principle”.

She implied in what she said that Chinese government’s action (interpretation of the Basic Law) has fueled concerns and undermined confidence in the ‘One Country, Two Systems’ principle so that she calls on Chinese government to refrain from such actions.

Hong Kong lawyers responded strongly due to their values from Western Culture. Reuters says in its report “Hong Kong lawyers march to condemn China’s legal ‘interference’” on November 8, “More than 1,000 Hong Kong lawyers dressed in black marched through the heart of the city in silence on Tuesday to condemn a move by China that effectively bars two elected pro-independence lawmakers from taking their seats in the legislature.”

Reuters quotes a Hong Kong solicitor as saying, “In the guise of putting forth an interpretation, they really have attempted to legislate for Hong Kong…”

The solicitor regards judicial independence as complete independence from Chinese central authority. That is true in the US with Western democracy but not in centralized China. China also advocated judicial independence but not independence from the Chinese Communist Party (CCP)’s leadership.

Therefore according to China’s traditional centralism, no one is independent from the central authority, which now is the CCP under the collective leadership with Xi Jinping as the core.

By setting the Basic Law as Hong Kong’s mini-constitution and stipulating that Chinese parliament the NPC has the power to amend and interpret the Basic Law in Articles 158 and 159 of the Basic Law, China retains some power of legislation. The solicitor complained as he failed to really understand China’s “One Country, Two Systems” policy.

What is most important is in Clause 3 of the Joint Declaration, China begins its declaration with subclause (1) “Upholding national unity and territorial integrity”, China decides to set up Hong Kong Special Administrative Region with the subclauses below that stipulate the “One Country, Two System” policy. If national unity and territorial integrity are broken by Hong Kong independence, there will be no “One Country, Two Systems” at all, not even the Hong Kong Special Administrative Region.


Reuters’ report mistakes “One Country, Two Systems” as agreement between China and Britain. No, there are some clauses of joint declaration between the two but some unilateral declarations by Britain and some by China in the Joint Declaration. Clause 3 is China’s unilateral declaration. It is not an agreement but a promise.

Breaking a promise is much less serious than breaking the obligation in an agreement especially when the promise is broken due to the breaking of the condition of national unity and territorial integrity under which the promise is made.

The clash of civilizations in Hong Kong will not give rise to a war but may cause China to break its promise and put an end to its “One Country, Two Systems” policy.

We, Hong Kong people, must be careful to avoid that. Otherwise, I will be punished for what I have written when the freedom of speech I enjoy in Hong Kong now will be deprived.

However, my greatest worry is the clash of civilizations between China and Taiwan, which may give rise to a cruel war.

President Tsai upholds Taiwan people’s right to determine their future, but China says that the 1.3 billion Chinese people do not allow that. If the clash intensifies and if the US continues its decline and become so weak as unable to protect Taiwan, China will take Taiwan by force.

Can I allow others to sleep soundly by the side of my bed?

Emperor Taizu of Song when he annexed South Tang

Comment by Chan Kai Yee on Reuters’ report, full text of which can be viewed respectively at http://www.reuters.com/article/us-hongkong-china-lawyers-idUSKBN13315Q
and http://www.reuters.com/article/us-hongkong-china-politics-britain-idUSKBN1321IF